Correlation Between Gravity and GDEV
Can any of the company-specific risk be diversified away by investing in both Gravity and GDEV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gravity and GDEV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gravity Co and GDEV Inc, you can compare the effects of market volatilities on Gravity and GDEV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gravity with a short position of GDEV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gravity and GDEV.
Diversification Opportunities for Gravity and GDEV
Good diversification
The 3 months correlation between Gravity and GDEV is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gravity Co and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV Inc and Gravity is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gravity Co are associated (or correlated) with GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Gravity i.e., Gravity and GDEV go up and down completely randomly.
Pair Corralation between Gravity and GDEV
Given the investment horizon of 90 days Gravity Co is expected to generate 0.34 times more return on investment than GDEV. However, Gravity Co is 2.93 times less risky than GDEV. It trades about 0.06 of its potential returns per unit of risk. GDEV Inc is currently generating about -0.26 per unit of risk. If you would invest 6,365 in Gravity Co on August 24, 2024 and sell it today you would earn a total of 146.00 from holding Gravity Co or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gravity Co vs. GDEV Inc
Performance |
| Timeline |
| Gravity |
| GDEV Inc |
Gravity and GDEV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gravity and GDEV
The main advantage of trading using opposite Gravity and GDEV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gravity position performs unexpectedly, GDEV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GDEV will offset losses from the drop in GDEV's long position.| Gravity vs. Doubledown Interactive Co | Gravity vs. Playtika Holding Corp | Gravity vs. NetEase | Gravity vs. SohuCom |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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